The Following Are Comparative Balance Sheets and an Income Statement

question 144

Essay

The following are comparative balance sheets and an income statement for Wentworth Company. Cash dividends of $45,000 were paid in 2018.
Required:
Prepare a statement of cash flows for 2018 using the direct method.

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Definitions:

Variable Overhead

Costs that vary with the level of production output, such as utilities for machines and indirect materials.

Direct Labor Hours

The total hours worked by employees directly involved in the production of goods or services.

Variable

An element, feature, or factor that is liable to vary or change.

Machine Hours

A measure of production time, calculated by the total hours machines are in operation over a set period.